Dollar rises slightly in quieter trading

The New Zealand dollar rose slightly today as the euro and Australian dollars drifted higher and the US dollar retreated from recent highs.

Dealers continued to reflect on the "slapping" at the hands of the United States Federal Reserve when it unexpectedly raised its discount rate last week. The NZ dollar fell more than a cent after the Fed decided to lift its discount rate, a rate at which it lends emergency funds, by 25 basis points to 0.75 per cent.

The NZ dollar was US70.26c at 5pm from US70.12c at 8am and US69.61c at 5pm on Friday.

"We were up and down around US70c in the morning and since then we've moved higher as the aussie, the euro and sterling got stronger," one dealer said.

"Kiwi's got a firmer tone," he said.

The NZ dollar had fallen as low as A77.80c against the Australain dollar in overnight trading but demand, perhaps from profit taking, saw it rise to A77.90c by 5pm. It was A78.10c at 5pm on Friday.

"The tragedy that is Greece is moving off centre stage without the traditional blood letting that one associates with such a show and the US economy is generating a lot of green shoots despite the Roundup that has been dumped on it in the last 18 months," Rankin Treasury said.

A testimony by US Federal Reserve chairman Ben Bernanke and US data this week would determine if the US financial markets could maintain their upward momentum.

The NZ dollar was at 0.5146 euro from 0.5161 euro on Friday. It rose to 64.36 yen from 63.82 yen on Friday.

The trade weighted index rose to 65.11 from 64.93 on Friday.

On Friday US time, the US dollar climbed across the board, touching an eight-month high against a currency basket, the day after the Federal Reserve move.

- NZPA